Like many of you, I get endless enjoyment from window-shopping used cars online. Whether it’s looking at prestigious international auction houses for my dream Ferrari F40 or searching online listings a little closer to home (and reality) for another old BMW, scanning through lists of classified ads with an imaginary briefcase full of cash is a great time-waster.
But it’s becoming less and less fun.
Used car prices are hitting stratospheric highs, making it difficult for enthusiasts and regular consumers alike to purchase a new (old) car.
Is it just me or did everyone invest in Bitcoin and become uber-rich throughout a pandemic-ridden 2020?
A decline in supply of new cars, thanks to the very real impacts of a global semiconductor shortage, has allowed used car sellers to bump up the prices of even the most mundane used cars.
Fancy a run-of-the-mill 2017 Holden Commodore SSV Redline? That’ll be $102,000 thanks. How about a six-year-old 2015 Mazda 2 for $22,700? Everyone likes utes, right – what about this three-year-old Ford Ranger that’s already clocked 54,000km for $61,900?
It’s all very well to make hay while the sun is shining, but far too many sellers have crossed the line of believability.
Calling it a used car price 'bubble' has become the norm to describe this weird phenomenon we currently find ourselves in, but a bubble implies that it has the ability to burst – when can we reasonably expect that to happen?
Personally, I’m thinking about this through the lens of someone who wants a weekend toy, but imagine being in the position of buying your first car. How on earth are young drivers supposed to get themselves into a safe, reliable and tech-adequate used car at current prices? It’s almost more affordable to walk into a dealership and buy new.
If you’re in the market for something fun and left field, you can basically forget it. I’ve turned off my search alerts for E30, E28 and E39 series BMWs because sellers are asking five times what I sold mine for just four years ago.
At the top end of town, I remember seeing stratospheric headline prices for some special cars through 2017 and wondered how long it would last. Things like Porsche GT3 RSes listed for circa $700,000 and Lamborghini Murcielagos priced at over a million dollars. It was weird to see back then, but those wacky prices seem to have dragged up the used car prices of normal cars now too.
It’s easier to stomach some of the silly prices enthusiast cars are listed at. There are elements of 'you only live once' and 'fear of missing out' mentalities around those. But it’s far more frustrating to see consumer used cars priced at high premiums.
And it’s endemic across the broad spectrum of used cars irrespective of segment, size and luxuriousness.
Between two-year-old Toyota LandCruiser Prados priced at beyond current 2020 stock prices, decade-old mid-level executive sedans listed at far more than they should be, and even Chinese utes listed at prices perilously close to what they were new, it’s getting more and more difficult to find a look-in anywhere in the market.
I suspect there’s a far divide between what a car’s listed for and what it’ll actually trade hands at, so where does this mentality of aim high and sell low come from?
According to data from US firm Moody's Analytics, used car prices in 2021 are continuing the astronomical trajectory they set in 2020, recording a 35.8 per cent surge over the last 12 months to January – based on wholesale data it compiled.
While some suggest a 35 per cent increase is an over-exaggeration, there is no doubt prices have risen well beyond normal parameters and inflation.
Paul Hopper of Victoria's Hopper Motor Group told CarAdvice earlier this year "prices are definitely up", but contended "the broad market is probably 15–30 per cent up [at most] depending on the model".
"There will be examples of the high percentages but they're more aberrations – for example, the headline numbers in the V8 market can be influenced by the collectable element as people attempt to snap up a bygone era," Mr Hopper said.
Mr Hopper said the real growth has been limited to SUVs and light commercial vehicles, while some shoppers looking to buy "small automatic hatches" are looking at "almost new-car pricing".
For those playing at home listing their own used cars just trying to follow the trend, your beaten-up 15-year-old Holden Commodore with 230,000km is probably not the cash cow you think it is.
Have a good, hard look at your car before listing it as such.
With that, I reckon it’s time to sell up. Anyone want to buy an 11-year-old BMW 3 Series Touring for $50K? Don't lowball me, I know what I've got.
What’s the worst display of blatant price-gouging you’ve seen in the used car market?